OpenAI walked away from one of its most important customers by cutting ties with the AI coding editor Cursor. Cursor has long paid OpenAI fees to offer the ChatGPT maker models to developers. At the start of 2026, Cursor was one of OpenAI top five customers in terms of revenue.
By the spring of this year, OpenAI estimated Cursor would bring in more than $1 billion in annualized revenue. The financial loss demonstrates the extent of the risk OpenAI is willing to take to avoid doing business with Elon Musk. Representatives for SpaceX and Cursor did not immediately respond to requests for comment, and OpenAI declined to comment.
OpenAI explained the decision in a public blog post. The company stated it could not be confident that SpaceX would use the technology within terms of service based on prior experience with Elon Musk companies violating contracts.
As OpenAI prepares to go public next year, it is trying to show investors a stable business. OpenAI reportedly now generates more than $40 billion in annualized revenue. This revenue comes from subscriptions, ads in ChatGPT, and selling access to its AI coding tool, Codex.
Losing Cursor may not hurt OpenAI financially as much as it once would have. However, ending the partnership may damage standing with developers by cutting off a major channel to access models.
Cursor founder and CEO Michael Truell responded publicly on X hours after the announcement. Truell claimed that OpenAI models only serve about 5 percent of Cursor user traffic. Thibault Sottiaux, OpenAI head of core products, quickly noted that token usage is not a proxy for revenue and asked Truell to share the math.
OpenAI noted in its blog post that earlier this year, Musk seemingly said that xAI used OpenAI models to train its own. That admission reportedly occurred during Musk deposition in a lawsuit against OpenAI. A federal jury dismissed the suit earlier this year.
OpenAI and Cursor share a long history. The OpenAI startup fund was one of the first investors in Cursor during its 2023 seed round. OpenAI even approached Cursor about an acquisition at one point, though talks did not reach an advanced stage.
Cursor will continue offering third-party models despite the breakup. Anthropic cofounder Tom Brown stated that his company would continue to make Claude models available in Cursor.
